As published in Scotsman Guide's Residential Edition, January 2006.
Technological advances in the past decade have led to significant changes in the way mortgage banking is conducted. The wholesale sector, in which traditional business models prevail, is an exception.
With the introduction of centralization, however, the status quo is changing slowly. This model enables the wholesale sector to overcome challenges that stem from its traditional fractionalized structure and offers many benefits to managers, brokers and account executives.
The pace of adoption is slow because old habits die hard, especially in the business world. Most wholesale operations deliver sales and service to brokers through account executives who are based in the field. These account executives then deliver loan files to an operations center. Established in the early days of mortgage banking, this system cannot offer several efficiencies that a centralized model can.
With a centralized model, account executives deliver sales pitches and view files online. Its many benefits include:
A centrally managed sales force: A sales force that is centrally managed is more focused and involved with brokers and customer files. Field account executives can sometimes be out of touch with their home office because they are trying to squeeze in time to follow up on loans after visiting their accounts.
Better tracking of customer needs: Account executives have access to an internal, contact-management system to better track a loan's progress and can therefore alert brokers to any status changes at a moment's notice. In short, this system allows companies to maintain superior communication internally and with brokers.
No geographical restrictions: In a centralized model, account executives are not restricted by territories. They can be more selective with accounts and concentrate on working with the best brokers. Field account executives are limited to calling on accounts in their assigned territories. They try to do business with every broker, even those who submit loans that clog up the system. This results in delayed decisions on loans submitted by brokers delivering completed packages.
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